Core Insights - VerifyMe, Inc. (NASDAQ:VRME) specializes in authentication and anti-counterfeiting solutions, facing challenges in capital efficiency as indicated by its negative Return on Invested Capital (ROIC) of -14.96% compared to a Weighted Average Cost of Capital (WACC) of 5.86% [1][2][6] Financial Performance - VRME's negative ROIC suggests inefficiencies in capital utilization, indicating that the company is not generating sufficient returns to cover its cost of capital [2][6] - In comparison, Oblong, Inc. (OBLG) has a significantly worse ROIC of -114.45% against a WACC of 18.35%, resulting in a ROIC to WACC ratio of -6.24, highlighting severe capital efficiency issues [3] - Usio, Inc. (USIO) also shows a negative ROIC of -86.25% with a WACC of 9.66%, leading to a ratio of -8.93, further indicating poor capital utilization [3] Peer Comparison - Wilhelmina International, Inc. (WHLM) stands out with a positive ROIC of 1.12% and a WACC of 6.94%, resulting in a ROIC to WACC ratio of 0.16, making it more attractive to investors focused on capital efficiency [4][6] - SilverSun Technologies, Inc. (SSNT) and MediaCo Holding Inc. (MDIA) also report negative ROICs of -1.29% and -6.53%, respectively, with WACCs of 14.77% and 6.61%, indicating similar inefficiencies in capital utilization as VRME [5][6]

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Financial Data and Key Metrics Changes - The company's third quarter revenue was $5.0 million, a decrease of $0.4 million from $5.4 million in the prior year, primarily due to $0.8 million of discontinued services with two proactive customers [7] - Gross profit increased by $0.2 million to $2.1 million in Q3 2025 compared to $1.9 million in Q3 2024, with gross margin rising to 41% from 35% [7][9] - The net loss for the quarter was $3.4 million, or $0.26 per diluted share, compared to a net loss of $2.9 million, or $0.23 per diluted share in Q3 2024 [9] Business Line Data and Key Metrics Changes - PeriShip revenue decreased approximately 14% in Q2 2025 compared to the previous year, but the revenue decline in Q3 2025 was only about 7% due to sales and marketing efforts [4] - Operating expenses decreased to $1.7 million in Q3 2025 from $2.5 million in Q3 2024, primarily due to the divestiture of the Trust Codes business and cost-cutting measures [9] Market Data and Key Metrics Changes - The transition to a new proactive shipping partner is expected to impact Q4 2025 and Q1 2026 revenues, with no guidance provided for 2026 at this time [5][8] - The company anticipates remaining cash flow positive for the full year of 2025 despite the transitional revenue impact [11] Company Strategy and Development Direction - The company is focused on transitioning to a new proactive shipping partner, which is believed to provide a better long-term platform for sustained organic growth [5][12] - The management emphasizes the importance of maintaining customer loyalty during the transition and is actively working to address customer concerns regarding the change [20][32] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the challenges posed by the transition from the previous shipping partner but remains optimistic about future growth and operational efficiencies [12][33] - The company plans to provide specific guidance for 2026 in the next earnings call, indicating a commitment to transparency and strategic planning [5][33] Other Important Information - A one-time non-cash impairment expense of $3.9 million was recognized in Q3 2025, related to goodwill and intangible assets in the PeriShip business [8][9] - The company has a strong balance sheet with no bank debt and continues to explore potential M&A opportunities [12][26] Q&A Session Summary Question: Revenue contribution from the proactive business that ended in September - Management indicated that they do not have a precise figure for the revenue contribution from the proactive business that is no longer part of the mix, as it is a dynamic situation [18][22] Question: Transition of customers to the new shipping partner - Management stated that not all customers will transition to the new partner, and some may delay their transition until after the peak shipping season [20][24] Question: Potential M&A discussions - Management confirmed ongoing conversations regarding potential acquisitions but noted that timing is difficult to predict [26] Question: Operating expense improvement details - Approximately $500,000 of the operating expense reduction was associated with the Trust Codes business, with the remainder attributed to improved management of operating expenses [28]

Financial Data and Key Metrics Changes - The company's Q3 2025 revenue was $5.0 million, down from $5.4 million in Q3 2024, a decrease of $0.4 million primarily due to $0.8 million from discontinued services with two proactive customers [8] - Gross profit increased by $0.2 million to $2.1 million in Q3 2025 compared to $1.9 million in Q3 2024, with gross margin rising to 41% from 35% [8][10] - The net loss for Q3 2025 was $3.4 million, or $0.26 per diluted share, compared to a net loss of $2.9 million, or $0.23 per diluted share in Q3 2024 [10] Business Line Data and Key Metrics Changes - PeriShip revenue decreased approximately 14% in Q2 2025 compared to the previous year, but the gross margin improved to 35% from 33% in Q1 2025 [4] - In Q3 2025, revenue was down only approximately 7% from the prior year due to sales and marketing efforts, although these efforts only partially offset the impact of contract changes [4][5] Market Data and Key Metrics Changes - The transition to a new proactive shipping partner is expected to materially impact Q4 2025 and Q1 2026 revenues, with no guidance provided for 2026 at this time [5][9] - The company anticipates remaining cash flow positive for the full year of 2025 despite expected revenue decreases [12] Company Strategy and Development Direction - The company is focused on transitioning to a new proactive shipping partner, which is believed to provide a better long-term platform for sustained organic growth [5][13] - The management emphasizes the importance of maintaining customer loyalty during the transition period and is actively working to address customer concerns regarding the change [21][22] Management Comments on Operating Environment and Future Outlook - Management acknowledges the challenges posed by the transition from the previous shipping partner and the impact on revenue, but remains optimistic about future growth opportunities [5][13] - The company plans to provide specific guidance for 2026 during the next earnings call, indicating a commitment to transparency and strategic planning [5][34] Other Important Information - A one-time non-cash impairment expense of $3.9 million was recognized in Q3 2025, related to goodwill and intangible assets in the PeriShip business [9][10] - The company has a strong balance sheet with no bank debt and continues to explore potential M&A opportunities [12][27] Q&A Session Summary Question: Revenue contribution from the proactive business that ended in September - Management indicated that they do not have a precise figure for the revenue contribution from the proactive business that is no longer part of the mix, as it is a dynamic situation [19][24] Question: Transition of customers to the new shipping partner - Management stated that not all customers will transition to the new partner, and some may delay their transition until after the peak shipping season [20][21] Question: Cash on the balance sheet and potential M&A - Management confirmed ongoing discussions regarding potential acquisitions but emphasized the difficulty in predicting timing and outcomes [27] Question: Operating expense improvement related to TrustCodes - Approximately $500,000 of operating expenses in Q3 2024 were associated with TrustCodes, contributing to the overall improvement in operating expenses [29]

Financial Data and Key Metrics Changes - The company's Q3 2025 revenue was $5.0 million, down from $5.4 million in Q3 2024, a decrease of $0.4 million primarily due to $0.8 million from discontinued services with two proactive customers [7][10] - Gross profit increased to $2.1 million in Q3 2025 from $1.9 million in Q3 2024, with gross margin improving to 41% from 35% [8][10] - The net loss for Q3 2025 was $3.4 million, or $0.26 per diluted share, compared to a net loss of $2.9 million, or $0.23 per diluted share in Q3 2024 [10][11] - Adjusted EBITDA improved to $0.8 million in Q3 2025 from $0.2 million in Q3 2024 [11] Business Line Data and Key Metrics Changes - PeriShip revenue decreased approximately 14% in Q2 2025 compared to the previous year, but Q3 2025 saw a smaller decline of about 7% due to sales and marketing efforts [4][5] - Operating expenses decreased to $1.7 million in Q3 2025 from $2.5 million in Q3 2024, attributed to the divestiture of the TrustCodes business and cost-cutting measures [10][11] Market Data and Key Metrics Changes - The transition to a new proactive shipping partner is expected to impact Q4 2025 and Q1 2026 revenues, with no specific guidance provided for 2026 at this time [5][9] - The company anticipates remaining cash flow positive for the full year of 2025 despite the transitional revenue impact [12][13] Company Strategy and Development Direction - The company is focused on transitioning to a new proactive shipping partner, which is believed to provide a better platform for sustained organic growth in the long term [5][13] - The management emphasizes the importance of maintaining customer loyalty during the transition and is actively working to facilitate customer shifts to the new partner [19][30] Management Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by the transition from the previous shipping partner and the impact on revenue, but expressed optimism about future growth and operational efficiencies [3][13] - The company plans to provide specific guidance for 2026 in the next earnings call, indicating a commitment to transparency and strategic planning [5][30] Other Important Information - The company recognized a one-time non-cash impairment expense of $3.9 million in Q3 2025 related to goodwill and intangible assets in the PeriShip business [9][10] - The cash balance as of September 30, 2025, was $4.0 million, with $1 million available under a line of credit and no outstanding borrowings [11][12] Q&A Session Summary Question: What was the revenue contribution of the proactive business that ended in September? - Management indicated that they do not have a precise figure for the revenue contribution from the proactive business, as it is a dynamic situation with ongoing customer transitions [17][21] Question: Can you provide last year's Q4 revenue contribution from the FedEx business? - Management stated that all proactive customers used FedEx last year, but they cannot provide a specific percentage of Q4 revenue from that business due to customer turnover and ongoing transitions [20][22] Question: What is the status of potential M&A discussions? - Management confirmed ongoing conversations regarding potential acquisitions but noted that timing is difficult to predict [25] Question: How much of the operating expense improvement was due to TrustCodes? - Approximately $500,000 of operating expenses in Q3 2024 were associated with TrustCodes, indicating significant cost reductions in the current period [27]

Financial Performance - Revenue for Q3 2025 was $5 million, a decrease of 7% compared to $54 million in Q3 2024[9, 12] - Gross profit in Q3 2025 increased by 6% to 41%, compared to 35% in Q3 2024[9] - Operating costs in Q3 2025, excluding impairment charges, reduced by 34% compared to Q3 2024[9] - Adjusted EBITDA for Q3 2025 was $832k, compared to $174k in Q3 2024[9] - Net loss includes an impairment charge of $39 million[14] Balance Sheet - Cash and cash equivalents were $4007k at the end of Q2 2025, compared to $2823k at the end of 2024[9, 16] - A short-term note receivable of $2 million was added[9] - Intangible assets & Goodwill decreased from $9353k to $5243k[16] Strategic Initiatives - The company expects Q4 2025 and Q1 2026 revenue to decline compared to the prior year due to customer transition[9] - The company is transitioning customers to a new Proactive shipping partner[9] - The company is completing integrations with e-commerce shopping carts[9]

Revenue Performance - Revenue for Q3 2025 was $5.0 million, a decrease of 7.4% from $5.4 million in Q3 2024, primarily due to a $0.8 million decrease from discontinued services[6][8] - Net revenue for the three months ended September 30, 2025, was $5,033 thousand, a decrease of 7.4% compared to $5,435 thousand for the same period in 2024[30] Profitability - Gross profit increased to $2.1 million in Q3 2025, resulting in a gross margin of 41%, up from 35% in Q3 2024[9][13] - Gross profit for the three months ended September 30, 2025, was $2,073 thousand, representing a 9.4% increase from $1,895 thousand in the prior year[30] - Adjusted EBITDA improved to $0.8 million in Q3 2025, compared to $0.2 million in Q3 2024, indicating positive operational performance[11][13] - Adjusted EBITDA for the three months ended September 30, 2025, was $832 thousand, significantly higher than $174 thousand in the same period of 2024[33] Net Loss - Net loss for Q3 2025 was ($3.4) million, compared to a net loss of ($2.4) million in Q3 2024, with loss per share of ($0.26) versus ($0.23) in the prior year[10][13] - The net loss for the three months ended September 30, 2025, was $3,356 thousand, compared to a net loss of $2,424 thousand for the same period in 2024, reflecting a 38.5% increase in losses[30] Expenses - Total operating expenses increased to $5,505 thousand for the three months ended September 30, 2025, up from $4,765 thousand in the same period of 2024, marking a 15.5% rise[30] Cash and Liquidity - Cash balance as of September 30, 2025, was $4.0 million, with cash provided by operations of $0.2 million in Q3 2025, compared to $0.0 million in Q3 2024[12][13] - Working capital as of September 30, 2025, was $5.7 million, reflecting the company's liquidity position[12] Strategic Initiatives - The company is pursuing strategic acquisitions to enhance its service offerings and is preparing for organic revenue growth in 2026[4] - The company has established a new partnership with a major parcel carrier in the US, which is expected to support future growth[4] Segment Performance - The Precision Logistics segment accounted for 99% of total revenues in Q3 2025, highlighting its significance to the company's operations[8] - Goodwill and intangible asset impairments in the Precision Logistics segment amounted to $3.9 million in Q3 2025, contributing to the increased net loss[10] Shareholder Information - The company had 12,734,425 shares issued and 12,252,977 shares outstanding as of September 30, 2025, compared to 10,829,908 shares issued and 10,539,441 shares outstanding as of December 31, 2024[27] Accumulated Deficit and Liabilities - The accumulated deficit as of September 30, 2025, was $(89,891) thousand, an increase from $(85,673) thousand as of December 31, 2024[28] - Total liabilities and stockholders' equity as of September 30, 2025, was $13,263 thousand, down from $16,067 thousand as of December 31, 2024[28] Impairments - Goodwill and intangible asset impairment for the three months ended September 30, 2025, was $3,850 thousand, compared to $2,252 thousand in the same period of 2024[30]

分组1 - VerifyMe, Inc. reported a quarterly loss of $0.02 per share, better than the Zacks Consensus Estimate of a loss of $0.04, representing an earnings surprise of +50.00% [1] - The company posted revenues of $5.03 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 2.92%, although this is a decrease from $5.43 million in the same quarter last year [2] - VerifyMe has surpassed consensus EPS estimates three times over the last four quarters and has topped consensus revenue estimates two times in the same period [2] 分组2 - The stock has underperformed, losing about 41.5% since the beginning of the year, compared to the S&P 500's gain of 14.6% [3] - The current consensus EPS estimate for the upcoming quarter is -$0.02 on revenues of $7.47 million, and for the current fiscal year, it is -$0.13 on revenues of $21.34 million [7] - The Zacks Industry Rank for Technology Services is in the top 27% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8]

Revenue Performance - For the three months ended September 30, 2025, the Precision Logistics segment generated revenue of $4,973,000, a decrease of 6.2% compared to $5,303,000 for the same period in 2024[55]. - The Premium services within the Precision Logistics segment saw revenue decline from $886,000 in Q3 2024 to $809,000 in Q3 2025, representing a decrease of 8.7%[55]. - For the nine months ended September 30, 2025, total revenue was $14,008,000, down from $16,546,000 in the same period of 2024, indicating a decline of 15.4%[55]. - The Proactive services revenue for the nine months ended September 30, 2025, was $11,687,000, compared to $12,587,000 in 2024, reflecting a decrease of 7.1%[55]. - The Authentication segment contributed $113,000 in revenue for the nine months ended September 30, 2025, down from $385,000 in the same period of 2024[55]. - For the three months ended September 30, 2025, the consolidated net revenue was $5,435,000, a decrease of 10.5% compared to $5,303,000 for the same period in 2024[142]. - For the nine months ended September 30, 2025, the consolidated net revenue was $16,546,000, a decrease of 6.5% from $17,688,000 in the same period of 2024[144]. Expenses and Losses - The net loss for the three months ended September 30, 2025, was $2,424,000, compared to a net loss of $3,356,000 for the same period in 2024, representing a 27.7% improvement[142]. - The net loss for the nine months ended September 30, 2025, was $3,323,000, compared to a net loss of $4,218,000 for the same period in 2024, indicating a 21.2% improvement[144]. - Total segment expenses for the three months ended September 30, 2025, were $3,987,000, compared to $4,836,000 in the same period of 2024, indicating a reduction of 17.5%[142]. - The total segment expenses for the nine months ended September 30, 2025, were $7,518,000, compared to $7,260,000 in the same period of 2024, reflecting an increase of 3.6%[144]. Impairments and Amortization - The company recorded a goodwill impairment charge of $1,062 thousand for the Precision Logistics segment during the three and nine months ended September 30, 2025, reducing the net book value to $2,926 thousand[66]. - An intangible asset impairment charge of $2,788 thousand was recorded during the three and nine months ended September 30, 2025, indicating that the carrying value of long-lived assets exceeded their estimated fair values[73]. - Amortization expense for intangible assets was $271 thousand for the three months ended September 30, 2025, and $819 thousand for the nine months ended September 30, 2025[77]. - The company expects to record amortization expense of $137 thousand in the remaining three months of 2025 and a total of $2,317 thousand over the next five years[78]. Share-Based Compensation - The total unrecognized share-based compensation cost related to unvested performance-based restricted stock units was $199 thousand, expected to be recognized over a weighted-average period of less than a year[106]. - The Company granted 110,773 restricted stock units with a grant date fair value of $1.52, while 155,038 units vested and 20,334 units were forfeited as of September 30, 2025[103]. - The Company had a total of 209,137 unvested restricted stock units with an average grant date fair value of $1.39 as of September 30, 2025[103]. - The Company issued 60,000 shares of restricted common stock valued at $41 thousand for consulting services on March 31, 2025, and an additional 60,000 shares valued at $45 thousand on September 30, 2025[83]. - The company expensed $92 thousand related to restricted stock units for the three months ended September 30, 2025[80]. Financial Position and Debt - As of September 30, 2025, the contract asset balance was $381 thousand, down from $786 thousand in 2024, with additions of $4,967 thousand and reclassifications to accounts receivable of $(5,319) thousand during the period[60]. - As of September 30, 2025, the Company had $0 outstanding on the revolving line of credit (RLOC) of $1 million[120]. - The Company entered into a Convertible Note Purchase Agreement for $1.1 million, with $400 thousand held by related parties as of September 30, 2025[122]. - For the nine months ended September 30, 2025, interest expense related to the convertible debt was $46 thousand, down from $66 thousand for the same period in 2024[122]. - The Company has a Master Loan Agreement with ZenCredit Ventures for up to $2 million at an annual interest rate of 16%, with $2 million loaned as of August 11, 2025[123]. - The PNC Facility includes a financial covenant to maintain a fixed charge coverage ratio of at least 1.10 to 1.00 at the end of each fiscal year[117]. - The Company had no taxes payable as of September 30, 2025, or December 31, 2024[124]. Operational Insights - The Company operates two reportable segments: Precision Logistics and Authentication, with the former accounting for nearly all of the revenue[28]. - The Company utilizes a proprietary software platform for predictive analytics in its Precision Logistics segment, enhancing service delivery and customer experience[28]. - One customer represented 12% of revenues for the nine months ended September 30, 2025, compared to 19% for the same period in 2024[134]. - One vendor accounted for 99% of transportation costs in the Precision Logistics segment during the three and nine months ended September 30, 2025[135]. - The company recognized a loss of $0.1 million on the sale of Trust Codes Global, which was sold for $1 NZD[61]. Stock and Shareholder Actions - As of September 30, 2025, the Company had 481,448 shares held in treasury valued at approximately $502 thousand, compared to 290,467 shares valued at $480 thousand as of December 31, 2024[88]. - The Company repurchased 272,177 shares for $221 thousand during the nine months ended September 30, 2025, under a share repurchase program approved in December 2023[89]. - As of September 30, 2025, there were no outstanding stock options, with a balance of 221,000 options as of December 31, 2024, all of which were forfeited or cancelled[97][99]. - The Company had 1,555,207 warrants outstanding as of September 30, 2025, with an average exercise price of $3.95, following the exercise of 1,461,896 warrants at an exercise price of $3.22[107]. - The Company has not sold any shares of common stock through the At-the-Market Sales Agreement, which has an aggregate offering price of $15.8 million[113][115]. Other Notable Events - The Company is currently evaluating the potential effects of new accounting standards on its financial statement disclosures, including ASU 2023-09 and ASU 2024-03[33][35]. - The company issued 70,000 restricted stock awards on October 9, 2025, vesting on October 9, 2026, to two members of the Board of Directors[146]. - After the third quarter ended September 30, 2025, the company discontinued one foreign patent application and abandoned one US and one European patent due to lack of planned use[146].